Good contracts can help, but timely and thorough reviews of shop drawings are, perhaps, the best defense.
Shop drawings are a controversial area for design professionals. These documents, prepared by others, not under the architect or engineer’s supervision are, by custom and by contract, reviewed by the designer and “approved” for fabrication and for construction. Several courts have found design professionals liable for negligent shop drawing review. A discussion of this topic starts with understanding the purpose of shop drawings.
Purpose of shop drawings. Contrary to popular belief, architects and engineers do not design each and every component of a building. Some items are manufactured products and the design professional specifies a particular make, model, color, and size appropriate for the project. The contractor is then required to submit information verifying that the right product will be supplied. Still other building components are custom fabricated for the project, and the detailing is left up to the fabricator itself. The fabricator’s drawings are then given to “the shop” for use in making the component – thus the name “shop drawing.” As one court stated, “shop drawings are the final word as to how the work should proceed on the job, and supersede the architectural plans.”
Under standard AIA contracts, the review process requires that the fabricator’s shop drawings are first submitted to the contractor, who is to review and “approve” them. The contractor checks the drawings for materials, field measurements and field construction criteria, and coordinates the information in such submittals with the requirements of the contract documents, and sends it on to the architect. The architect’s review and approval is limited to “checking for conformance with information given and the design concept expressed in the Contract Documents.” AIA A201 Par. 4.2.7 (2017). When the shop drawing is returned “approved” by the architect, then the contractor can order or fabricate that item.
Liability for negligent review. Negligent review and approval by the design professional may result in liability, depending on the facts and the contractual duties of the reviewing professional. In a 1983 case, specifications called for use of 10-gauge steel on a stair landing, but shop drawings were submitted which called for thinner, 14-gauge steel and were approved by the architect. When the light-gauge landing pan collapsed and injured two workers, the architect was sued and was found liable for the injuries. In a 1995 case, a worker was injured when he fell from an unguarded walkway along a shoring wall and he sued the engineer for professional malpractice in reviewing the shop drawings. The court ruled for the engineer, however, finding that the engineer owed no duty to the worker for handrails or barricades of a temporary nature since those features were “primarily a safety measure rather than an inherent design requirement of the structure of the shoring wall.”
Where the shop drawing relates to the means and methods of construction, AIA-type contract language may shield the design professional from liability. In a 1982 case, an architect was found not liable for the deaths of two workers and the injury of another allegedly caused by negligent approval of shop drawings for steel erection because, under the AIA General Conditions, the contractor, not the architect, was responsible for temporary field connections and for the means and methods of construction.
Does approval sanction a defective submittal? That question has been answered differently in various cases. In a 1977 case, the specifications called for “solid wood doors” but the contractor supplied “particle board doors.” The court held that the architect’s approval of the shop drawing did not sanction the use of nonconforming doors based on contract language which defined the architect’s “approval.” Like AIA’s A201, the contract stated that the contractor was not relieved of responsibility for deviations from the contract requirements by the architect’s approval of shop drawings unless the contractor had notified the architect of the deviation and the architect had given specific written approval of the deviation. Such contract language may deflect liability from the design professional. For example, in a 1995 case, the court held that the engineer’s stamp, which stated that “review does not relieve the contractor from complying with all requirements of the contract documents,” meant that the contractor was liable for the failure of certain post-tensioning components, and that the engineer’s approval did not waive the original contract requirements.
Delays in approval. Some of the lawsuits over shop drawings relate to project delays due to late action on submittals. These cases meet with mixed results. For example, in a 1977 case, a contractor sued the project architects to recover for increased costs due, in part, to negligent and tardy approval of shop drawings. Likewise, in a 1995 case, a subcontractor sued the project engineer for costs arising from rejecting the sub’s initial shop drawings and in preparing new shop drawings, when the original drawings complied with the contract documents. In a 1989 case, an architect was held liable to a contractor for delay damages arising, in part, from the architect’s negligent interpretation of contract documents and its responses to shop drawings. However, in a 1988 case, an engineer was found immune from the contractor’s suit for delayed approval of shop drawings based on a contract clause that said the engineer owed no duty to the contractor. Since delayed reviews can hold up fabrication and cause schedule delays, design professionals need to track their response time. The AIA publishes a form to track review of shop drawings and other submittals. AIA G712 (1972).
In states that have adopted the “economic loss doctrine,” pure delay claims caused by negligent review of shop drawings cannot be made by a contractor or subcontractor against a design firm with whom they have no contract. In a 1989 case, a contractor that had no direct contract with the engineering firm was barred from suing for delay damages for negligent review of shop drawings under that doctrine. Also, a “no-damages-for-delay” clause in a construction contract was found to bar claims related to late shop drawing reviews in a 2010 case.
Shop drawing stamps. There is a wide variety of wording used on shop drawing stamps. Especially during the mid-1980s, there was a push to avoid using the word “approved” on shop drawing stamps with the logic that if design professionals avoided using the “A-word,” they might not have liability for action taken by them on submittals. However, time has shown that courts often equate a “Reviewed” stamp with “Approved,” regardless of the wording used on the stamp. In a recent 2017 Iowa case, the engineer’s stamp “Furnish as Submitted” was held equivalent to “Approved.” In the 1984 Hyatt Skywalk case, discussed below, the Administrative Law Judge found that, “Although the contract documents require that shop and erection drawings be submitted to the engineer of record for ‘review and approval,’ testimony at trial indicates that engineers never use the term ‘approved’ when indicating review and approval of these drawings. This custom apparently rests upon the dubious basis that most engineers’ insurance carriers have directed that the word ‘approve’ not be used.” That judge ruled that the engineer’s “review stamp” on shop and erection drawings, “functionally indicates both review and approval.”
No action taken. A design professional’s failure to take action on a submittal does not necessarily mean “approval,” however, as one court ruled in 1946. The contract stated that shop drawings submitted without being required would be returned “without action.” The court held that the subcontractor wrongly assumed that shop drawings returned with no action were “approved.” Today, AIA’s General Conditions permit architects to request “informational” submittals, without the need to approve those documents. A201, par. 3.12.4 (2017). Contractors should not assume that the absence of action on such submittals means “approval.”
The Hyatt skywalk case. No single event has had such a dramatic effect on the construction industry as did the collapse of the Hyatt skywalks in 1981, in which 114 people were killed and over 200 more were injured. In the wake of this disaster, the industry engaged in a decade-long review of the entire process of shop drawings and design delegation. The Administrative Law Judge’s 442-page opinion in this case found violations of the state licensing laws sufficient to permanently revoke the licenses of two engineers. The engineers appealed and lost, with the Missouri Court of Appeals ruling that the reviewing engineer was aware of a design change made by the steel fabricator, as reflected on the shop drawings, but that engineer did not review the redesigned connection for structural integrity, a willful act with wrongful intention, constituting “gross negligence.” As a direct result of the Hyatt skywalk disaster, and national attention on the shop drawing review process, the 1987 edition of the AIA General Conditions added four new disclaimers of what the architect’s approval “is not.” The 1997 edition carried forward the expanded language, with an added section related to design-build components and more protection for the architect. AIA A201, par. 3.12.10.1 (2017); See also, B101, par. 3.6.4.3 (2017).
Conclusion. While there have not been any major lawsuits in recent years over shop drawings, the topic remains one of potential liability for design professionals. Good contracts can help, but timely and thorough reviews of shop drawings are, perhaps, the best defense.
William Quatman, FAIA, Esq., is general counsel and senior vice president at Burns & McDonnell Engineering Co. He can be reached at bquatman@burnsmcd.com.
